[Update: for the newest on my brokerage recommends (or non-recommends), browse the Forex Brokers category of this blog.]

Previous post: Forex Robots. This post: free proxy exchange-trading.

There is this web site that will give you cash back for every trade you place on a foreign exchange through a broker that they’ll sign you up with. One of these brokers is the broker I’m using my robots with (FXDD). They have quite narrow spreads – which basically means, you’ll be able to invest more and therefore return more.

This web site is called Cash Back Forex.

So the how to steps are these:

A) Go to this site (link), and follow steps 1, 2 and 3 at the top of the page. For your broker, choose FXDD. Why? Like I said, narrow spreads – but their minimum deposit is $250, so you can start out investing only that much. If you have $250 to burn, this is a great way to burn it, baby. To sign up with FXDD you’ll need to fill out quite a bit of information (so they know you aren’t a money-laundering terrorist), and it may take a day for your account to be approved.

B) Once you have your FXDD account set up, sign up for an account at Zulu Trade and/or AUTO FX.

Who are AUTO FX and Zulu Trade? Automated buy or sell signal providers. They allow you to select from a wide variety of professional or avocational traders, whose own trading decisions will be automatically sent to your live Forex (FXDD or other brokerage) account. When the pro decides it’s time to buy or sell, they issue the order, and the same buy or sell signal is placed (or mirrored) in your account. To get this started, you officially link your signal provider account to your brokerage (in the case of FXDD, for me that meant signing and faxing a form).

Once you have it set up, the pros run all your trades for you. And if you pick one who really knows what they’re doing (which you can verify with their profit track record), your money will grow, automatically, while you do nothing. And on top of this, since you set up your brokerage through Cash Back Forex, when your account grows enough, you’ll start getting checks cut to you of part of the commission the broker made on every trade you placed.

With a good signal provider you’ll get far better returns than a money market, mutual fund, or other kind of large, “traditional” investment.

This is very much like the robot setup introduced in my previous post, except the buy and sell commands are sent by other people instead of robots. Actually, many of the signal providers (apparently) generate their buy and sell signals with robots.

You can mix this and your own robot-automated trading in your Forex brokerage account. I’m going to.

I haven’t got my Zulu Trade signal provider sending signals to my FXDD account yet, but I’m going to try one or two signal providers with a great track record when I do. I’m going to use the providers “lowestDD” (DD meaning DrawDown – amount lost) and “Smart Forex”. What I look for in a signal provider: 1) They invest their own money using the same orders they’ll mirror to your account – literally putting their money where their mouth is 2) They have a history with the lowest possible Draw Down (losses) 3) Highest possible profit, and 4) Longest possible profitable history.

The position size (or how much money you invest) in any of the buy or sell signals mirrored to your brokerage are automatically scaled up or down to the size of your account and the preference you set. For a micro account starting with $250, you’ll want to find a quite conservatively small “lot size” (and truth be told, I need to figure out exactly what “lot size” means).